The McClatchy Strib: RIP. WTF?

Pruitt's Folly, big-daily blues, and the invasion of the stripper-flippers

On Wall Street, "union shop" just means "impediment to cost-cutting."And what's true on Wall Street is increasingly what's true in the McClatchy boardroom as well. Some longtime newsroom vets have had the feeling for several years now that McClatchy was moving to kill the union. They claim the company has slowly but steadily ratcheted up its challenges to Newspaper Guild members by means such as flouting work rules (union members filed just 12 grievances against the company in the eight-year period from 1995 through 2002—and 23 more in the four years since) and forcing grievances to arbitration rather than trying to settle them.

When an arbitrator ruled against the paper on its use of non-Guild writer Paul Douglas, the WCCO weatherman, in March 2005, management spent more than a year appealing the decision in court. After losing in federal court, they appealed for a second time, in Eighth District Circuit Court, where they eventually lost again, in June 2006. Last fall, half a dozen reporters withheld their bylines from a series on ethanol to protest the editing of the series by a non-Guild employee. McClatchy's distaste for Guild newsroom was made manifest last summer when execs picked the 12 Knight Ridder papers they would resell. The list included all but one of the unionized newsrooms KR had owned. In dumping the Star Tribune, Pruitt got rid of one more.

III. THE NEW BOSSES: HOW MUCH DO THEY STRIP, HOW SOON DO THEY FLIP?


Hey, Give That Guy a Newspaper

The following excerpt from a December Esquire interview with software/web/cable TV entrepreneur and Dallas Mavericks owner Mark Cuban was widely circulated via email at the Star Tribune last week:

If I had more time?

I'd get into places where people are so afraid right now that the economics dominate the common sense. I'd get into a business like newspapers—local newspapers. Newspapers are a perfect example of how economics dominate common sense. Contrary to popular belief, newspapers aren't dying. Newspapers are making tons of money; they just aren't keeping their shareholders happy, they aren't meeting the expectations on Wall Street. The problem with newspapers is that they're trying to grow like they're Internet companies in 1999....

I don't care how Internet savvy you are or whether you're in 9th grade or college, you're not going to read 25 pages of text online. In newspapers, you read more pages, you read more words. There's no way around it. But newspapers don't see their own value. They just don't get it. So they do dumb-ass shit, like they can't figure out who their customer is, they can't figure out what business they're in. They have all these news-wire reports, these breaking stories, but anyone who's Internet savvy knows that breaking stories, sports events, all that stuff is available on the Internet 30 seconds after it happens.... But when you read The New York Times or you read the L.A. Times, you read the Chicago Trib or The Dallas Morning News, when they break a story that is unique, not just first, but unique, a story that you can't just pick up on the wire, you have to read it.... So newspapers aren't dying; they're just undergoing an identity crisis. They don't know who they want to be.

No one in the Strib rank and file has a clue about their new owners, Avista Capital Partners. "We're reporters," Guild officer Chris Serres sighed in exasperation last week, "so we're calling people we know in the industry and at the buyout firms to assemble a dossier on Avista. But they've only been around for a year. They haven't owned any companies long enough to judge their track record in dealing with employees." (Serres asked Chris Harte, a former daily publisher who will manage the property for Avista, to meet with the Guild during a visit to town last week, but "he said he didn't want to meet with us.")

One point most insiders are taking for granted is that there is no such thing as an investment banking group that does not yearn to liquidate some assets immediately. Everyone in the world expects a quick sale of the paper's extensive downtown real estate holdings, some five blocks in the neighborhood of the Metrodome. Economics reporter Mike Meyers thinks the parcels will fetch $100 million or more. "If you want to be comforted," he said, "the real estate should be comforting. That sale could give them a serious return very quickly. This land is more valuable than it used to be, whether the stadium's built there or not.

"[Avista] could run it for a while, skim off some cream, and everybody lives happily ever after. I'm not that worried about this sale. I'm worried about the next sale, to a company that won't have a ready asset like that land to sell."

But most people presume there will be cutting at the paper, too. A January 6 Wall Street Journal profile of Avista sketched in some additional background about the buyers and the deal: "Thompson Dean and Steven Webster have been well known in the buyout community for more than a decade. They ran a group that generated returns of about 50 percent from buyout investments for Donaldson, Lufkin & Jenrette, which was acquired by Credit Suisse in 2000.... Avista hasn't said how much of its fund's own cash it will use for the purchase price and how much of it will come from debt it will pile on the paper."

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